ware house procedure, Central Excise

[SACHIN SHAH]

sir,

we are group of companies  a ( gujarat ) , b(Chennai ) , c ( colcutta ) , d ( Bangalor ) . We have client differnt location all over india . All companies manufacturing product same .

My problem is that when we have supply material from gujarat to chenai delivery time ( lead time ) is very high . So we are some solution like we transfer this material to Chenai company & they will sale this material to chennai pary .

Please suggest what procedure we can adopt for this .

Regards,

SACHIN

 

Posts / Replies

[CA Rachit Agarwal]

If you sell the material from company "a", to company "b", then there will be impact of CST which would reduce the profitability as claim for Input Tax Credit is not be available to company "b" on purchase.

You can open the branch for company "a" in Chennai and then sale the material to "b" in Chennai. Hence the sale will be on VAT. Now on further sale by "b", company "b" will be eligible for the Input Tax Credit.

Further the compliances will increase as per the prevailing VAT Law in the respective state.

[Bharat Chavda]

What will be impact on entry tax in tamilnadu?